Introduction

Since its 1976 admission to the G7 club of major industrial democracies, Canada has regularly played an active, influential role in the forum, using its membership to secure advances on core Canadian interests and values. Above all, as the G7's smallest member and the one with the most open economy, Canada has sought to maintain the G7 as an exclusive forum that can act quickly, cohesively and effectively to respond to crises and provide leadership on the major economic issues of the day. In particular, it has used the G7 to forward the process of multilateral trade liberalization, north-south relations, and more recently the reform of the international financial institutions founded in 1945. At the same time, Canada has long worked to develop the capacity of the G7 to deal with political-security and transnational-global issues, notably in the fields of arms control, regional security and environmental protection. It has also pressed to make the G7 a forum for genuinely global governance, by extending the focus of the G7 beyond the Euro- Atlantic world to embrace Asia. Above all, Canada has been a leading enthusiast of using the G7 to defend and promote the global spread of democratic governance and human rights.

These historic emphases have corresponded to a high degree with the essential interests of Taiwan, a polity which, after its pre-eminent relationship with the United States, looks to the major industrial democracies of the G7 for support in times of difficulty. Building the G7 as an effective center of global governance, composed exclusively of major market democracies, and embracing global security issues, is a preferred alternative to centering management in the United Nations, where the permanent veto seat of the PRC on the Security Council provides Taiwan's rival with status and influence. The emphasis on the G7's economic leadership, with the G7's Pacific powers of the United States, Japan and Canada acting collectively to stabilize and open the world economy, has been of considerable value to a Taiwan whose economic power, a vital aspect of its international survival, depends on stable and open financial, trade and investment exchanges with the outside world, and above all with the G7 power themselves. Canada's use of the G7 to address and engage extraregional major powers in Asian security problems in Cambodia and on the Korean Peninsula induces a stability and deterrence that benefits Taiwan. In this respect, the G7's emphasis on the promotion of democracy and protection of human rights has been essential in affirming the legitimacy of the now democratic Taiwan vis a vis the claims of the still largely closed polity and controlled economy of the PRC.

The end of the European cold war and advent of globalization in the 1990's brought potential challenges to this historic convergence of Canadian G7 and Taiwanese interests. The first transformation threatened to reduce the relevance of Taiwan's status as an anti- Communist ally, and opened the issue of membership for Russia, and potentially other claimants such as the PRC and Indonesia, in such organizations as the G7 and World Trade Organization (WTO). Moreover the widespread trade liberalization brought by globalization, and the ensuing rivalry to secure new export markets among emerging economies, gave the PRC a strong appeal to all members of the G7, and an incentive for G7 members to pursue individual economic advantage at the expense of collective political interests. Adjusting readily to these forces was the Canadian government of Jean Chrétien, which, upon its October 1993 election, looked with sympathy on the inclusion of Russia in the G7, and immediately positioned Canada as the country most sympathetic to the PRC within the west.

These Canadian emphases were evident in Canadian diplomacy at the renamed 1997 "Denver Summit of the Eight." Here Canada readily acquiesced to an American desire to use Denver to highlight the G7's acceptance of Russia as a virtually full member, and to delay any serious engagement on further comprehensive multilateral trade liberalization pending President Clinton's acquisition of "fast track" authority from Congress. Moreover Canada worked to carefully modulate the G7's statement on the need to maintain a vigilant watch on the preservation of democratic freedoms and human rights in Hong Kong.

Yet beneath these adjustments of the moment lay a continuation of Canada's traditional approach in the G7, and thus Canada's support for the essential interests of Taiwan. Canada was a full part of the leaders' vigorous discussion of Hong Kong and the core consensus that the G7 publicly and collectively state the standards that the PRC must meet in the post-transition period. Beyond the greater participation accorded to a now democratic and market-oriented Russia, Canada remained opposed to opening the G7, the WTO and other international economic institutions to countries not yet meeting the normal entry criteria. Moreover Canada's activism in the security field, above all in seeking a ban on landmines, underscored the large differences in interests and values between it and the PRC. Although America's rising power and the self-confidence it gave President Clinton limited Canadian capacity for success at Denver, Canada's influence at the margins was exercised effectively to promote a continuation of the democratic-market transformation globally, stability in Asia, and the essential interests of Taiwan.

To develop these arguments, this paper first reviews Canada's G7 diplomacy from 1976 to 1996, demonstrating Canada's recurrent emphasis on developing the G7 as an exclusive, effective forum to promote the global spread of democracy and human rights and open markets and stability in Asia. It next examines Canada's positions, diplomacy and achievements at the Denver Summit of the Eight, in regard to the core issues of Russian participation, the transition in Hong Kong, trade liberalization, arms control and Asian security. It concludes by briefly considering Canada's G7 diplomacy in the leadup